Cohesion Policy: investing in the real economy
The contribution of cohesion policy to the real economy is proving to be essential in the current context of economic crisis. The Commission invites Member States to take full advantage of the possibilities of this policy. It identifies new guidelines to take the new constraints and opportunities of the Economic Recovery Plan into account.
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 - ‘Cohesion Policy: investing in the real economy’ [COM(2008) 876 - Not published in the Official Journal].
Cohesion policy programmes contribute to the European Economic Recovery Plan in an essential way. They support public investment at regional and local level, whilst facilitating aid to the people who are hardest hit by the economic crisis and access to funding for small and medium-sized enterprises (SMEs).
Cohesion Policy contributes to the long-term aims of the Lisbon Strategy and the sustainable development of the European Union (EU). It is aimed in particular at regions concerned by the European Regional Development Fund (ERDF) (2007-2013).
Investing in the real economy
The Commission encourages the maintaining of public investment levels. It recommends adapting the aims of Community programmes with regard to areas with significant growth potential. Levels of public co-funding should be guaranteed by adjusting Community and national contributions according to these priorities.
The present strategy is accompanied by legislative proposals aimed at accelerating investments, by facilitating:
- the availability of public cash flow, in particular concerning the reimbursement of expenditure incurred for major projects and state aid schemes;
- access to funding, through new financial engineering instruments;
- implementation of projects using flat rates and lump sums for costs;
- the promotion of energy performance and renewable energies in housing, in particular with the aim of contributing to social cohesion.
Sources of funding should be diversified to take into account the effects of the economic downturn on public budget resources. Financial incentives should combine Community and national measures. Investments should also be made by using repayable and revolving financial instruments.
Cohesion Policy contributes to protecting jobs, and to modernising labour markets and education systems. Member States should integrate flexicurity strategies and improve workers’ levels of qualification.
The use of European Social Fund (ESF) funding allows the following to be facilitated: adapting to change, transitions after job loss and the social integration of those who are most vulnerable to long term unemployment (older people, minorities, the low skilled).
To promote an environment which is favourable to stability, competitiveness and the innovation potential of companies, Member States should take full advantage of Community financial aid and techniques.
In particular, this is the function of the initiatives developed jointly by the Commission and the European Investment Bank (EIB). The JEREMIE initiative thus procures joint European resources for micro-enterprises and SMEs, and the JASMINE initiative supports micro-finance institutions in Europe.
Infrastructure and energy
Investment in infrastructures and networks benefits cohesion in the European territory. Moreover, the EU should evolve towards a low-carbon economy and ensure sustainable use of energy resources. The market should therefore be targeted to renewable energies and sustainable transport. Supply sources should be diversified to guarantee the availability and stability of prices of resources.
National and Community programmes should be used to realise these objectives. The priorities of the European Regional Development Fund (ERDF) should be adapted to this end, as should the financial and technical capacities of the JESSICA initiative for sustainable development in urban areas and the JASPERS initiative for technical assistance.
Research and innovation
The growth of the knowledge economy particularly depends on levels of investment in research and innovation. They should allow capacities, infrastructures and human capital to be strengthened, by aiming in particular at SMEs and areas with significant growth potential. Better synergy should be found between sources of Community funding in order to take these priorities into account.
Cohesion Policy contributes in a stable, secure and targeted way to the European Economic Recovery Plan to mitigate the slowdown of growth. Over the period 2007-13, EUR 347 billion will be invested to stimulate growth and contribute to European economic and social cohesion.